Sant

Sant Corporation of Cincinnati, OH and Kadient of Lowell, MA announced a merger today. The two companies appear to have complementary offerings and I think the merger will be a good one for both parties and for the customer base.

Over the last couple of years, Kadient has been on a difficult quest made harder by a recalcitrant economy. CEO, Brian Zanghi who will remain on the board of directors, took Kadient (formerly Pragmatech) from a business that was not unlike Sant’s and competed with it, to reposition Kadient in the SaaS world. Sant and Pragmatech both offered products that automated, to the extent possible, the sales proposal process and managed relevant documents and components of documents.

Beginning a couple of years ago, Zanghi began taking Pragmatech on a journey that would rebrand the company and change its focus from on-premise to SaaS and from proposals to dynamic interaction with sales teams through the use of playbooks. Zanghi’s vision was essentially correct and I have written about it before. Playbooks are an invention that applies analytics to deal information captured throughout the normal course of doing business. When analytics are applied managers and sales people can discover which presentations, proposals or tactics work best in a variety of situations and use this knowledge for future deals. The idea makes sense and you can see it replicated in Salesforce.com and Oracle sales automation tools.

Kadient had some tough sledding changing its model and facing the recession but the company has been gaining traction in a market for sales enablement products that can be notoriously difficult. Sales people hate having their cheese moved as the long adoption curve for SFA amply describes. Sales enablement is another idea that makes sense but which has legions of doubters. I don’t know if adoption was an issue for Kadient as much as the tendency for sales to hunker down during recessions.

At any rate, Sant and Kadient are now together and I think one of the attractions of the merger for Sant was how far Kadient has come — a distance that Sant also had to travel prior to the merger. Sant will now have to quickly figure out the SaaS model and I look forward to better understanding their strategy for the balance of their product set.

Finally, this merger highlights the reality that the IPO market is still moribund and the path to a liquidity event does not go through Wall Street these days. In some ways that makes doing a deal easier but it also significantly reduces the value of a company.

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